The High Court has refused Limerick City Council’s application to set aside or remit parts of an interim arbitration award in its dispute with Uniform Construction Limited, finding that none of the grounds raised justified court intervention.
The judgment, delivered by Mr Justice Clarke on 1 November 2005, concerned only the first of two consolidated proceedings. In that case, the council challenged findings in an award published on 27 June 2005. A second proceeding, which also named the arbitrator, sought a special case on questions of law. The court left that matter for later consideration because it was largely contingent on the outcome of the first proceeding.
The dispute arose from a contract for about 2.6 kilometres of sewer works beneath Limerick. The council had forfeited the contract in 2001. The arbitrator found that Uniform could propose a lower tunnel route under the contract, subject to specified conditions, and that an engineer’s June 2000 instruction to build at the original design level was a variation. The council argued that the arbitrator had made fundamental legal errors, failed to decide the effect of a May 2000 letter, and wrongly assessed whether Uniform was persistently in breach.
The court held that intervention for an error of law on the face of an award was limited to an error so fundamental or clearly wrong that it could not be allowed to stand. It found that assessing the tunnel-route issue required construing a range of contract documents and considering their history. Any error, if there was one, did not meet that threshold. The court also rejected a separate challenge concerning the specification’s requirements for alternative proposals, finding the contractual questions complex rather than obviously and fundamentally wrong.
On persistent breach, the court read the award as a whole and was not satisfied that the arbitrator had assessed incidents only in isolation or applied a test the parties had no chance to address. It also found no failure to decide the May letter issue: the award’s findings supported the inference that the letter did not alter the relevant contractual obligations. The arbitrator had concluded that the engineer relied on mistaken interpretations of the contract when issuing the Clause 63 certificate, so the court said it was open to him to find against the certificate without separately deciding whether a reasonable engineer could have issued it on another ground.
The court therefore declined to set aside or remit any part of the challenged award. It did not decide whether the arbitrator’s contract interpretation was actually wrong; it decided only that any possible error did not justify intervention. The judgment did not determine the second proceeding.